Iqiyi (IQ) AI Stock Analysis

• Market Cap: $1.67B
• Dividend Yield: N/A
• Average Volume (3M): 20.26M
• Price to Earnings (P/E): 41.3
• Beta (1Y): 1.21
• Revenue Growth: -10.05%
• EPS Growth: -85.30%
• Country: US
• Employees: 4,673
• Sector: Communication Services
• Sector Strength: 85
• Industry: Entertainment
• EPS (TTM): 0.04
• Shares Outstanding: 528,516,360
• 10 Day Avg. Volume: 20,277,084
• 30 Day Avg. Volume: 20,255,445
• PEG Ratio: 18.93
• Price to Book (P/B): 35.02
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -35.18
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $2.08
• Price Target Upside: 20.23% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

• Rating: 59 Neutral
• Price Target: $2.00 ▲(15.61%Upside)

Iqiyi's stock is rated at 59 due to its improved financial performance and positive earnings call, which are offset by high valuation, declining revenue, and technical indicators suggesting a bearish trend.

Positive Factors

Content Strategy

The company is making strategic efforts to diversify its content mix through micro-dramas and premium titles, showing early signs of positive progress.

User Engagement

Micro-dramas have driven strong user engagement and are becoming an important part of iQIYI's offering.

Negative Factors

Financial Performance

Continued investments in micro-dramas and AI for enhanced user interaction will put pressure on margins in the near term.

Operating Income

Increased mini-drama investment weighs on iQiyi's finances, leading to a lower-than-expected non-GAAP operating income.

Revenue and Profitability

IQIYI's growth challenges remain, with the company guiding for flat revenue, implying a year-on-year decline.

Subscriber Numbers

Continued year-over-year pressure on subscriber numbers is expected.

Iqiyi Business Overview & Revenue Model

Company Description

iQIYI, Inc., together with its subsidiaries, provides online entertainment services under the iQIYI brand in the People's Republic of China. The company offers various products and services comprising internet video, online games, live broadcasting, online literature, animations, e-commerce, and social media platform. It operates a platform that provides a collection of internet video content, including professionally-produced content licensed from professional content providers and self-produced content. The company also provides membership, content distribution, and online advertising services. In addition, it operates iQIYI Show, a live broadcasting service that enables users to follow their favorite hosts, celebrities, and shows in real time through live broadcasting; and iQIYI Lite, an easy and quick access to the personalized videos based on their user preferences. Further, it is involved in the talent agency and IP licensing activities, as well as engages in developing a video community app. The company was formerly known as Qiyi.com, Inc. and changed its name to iQIYI, Inc. in November 2017. iQIYI, Inc. was incorporated in 2009 and is headquartered in Beijing, China. iQIYI, Inc. is a subsidiary of Baidu Holdings Limited.

How the Company Makes Money

iQIYI generates revenue primarily through subscription services, where users pay for access to premium content. The company also earns money through advertising, with brands paying to display ads to iQIYI's large user base. Additionally, iQIYI has revenue streams from content distribution, licensing its original productions to other platforms and networks. The company also engages in partnerships with various content creators and production houses to expand its content offering and reach. Furthermore, iQIYI explores additional monetization opportunities through online gaming, live streaming, and membership services, leveraging its strong brand presence and technological capabilities.

Iqiyi Financial Statement Overview

Summary

Iqiyi's financial performance shows improvement in profitability and operational efficiency, with positive EBIT and EBITDA margins. However, the decline in revenue and high debt levels are concerning, requiring effective debt management and sustained cash flow generation for long-term stability.

Income Statement

Iqiyi's revenue showed a decline from 2023 to 2024, with a revenue growth rate of -8.31%. Despite this, the company improved its profitability metrics, with a gross profit margin of 24.88% and a net profit margin of 2.61% in 2024, compared to previous losses. The company's EBIT and EBITDA margins were positive, indicating operational improvements. However, the revenue decline remains a concern.

Balance Sheet

Iqiyi's balance sheet reflects a moderate financial position. The debt-to-equity ratio of 1.06 is stable but shows reliance on debt. Return on Equity improved significantly to 5.72% in 2024, reflecting better profitability. The equity ratio stands at 29.21%, indicating a decent proportion of assets funded by equity. While there are improvements, the high debt levels could pose risks in the future.

Cash Flow

The cash flow statement indicates a decline in free cash flow from 2023 to 2024 by 37.46%. The operating cash flow to net income ratio was 2.76, suggesting strong cash generation relative to profits. However, the free cash flow to net income ratio was 2.66, highlighting potential challenges in maintaining cash flow levels amidst revenue declines.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
29.23B	31.87B	29.00B	30.55B	29.71B
	Gross Profit
7.27B	8.77B	6.68B	3.04B	1.82B
	EBIT
1.81B	2.99B	-12.81B	-4.48B	-6.04B
	EBITDA
1.82B	17.25B	14.34B	12.10B	11.28B
	Net Income Common Stockholders
764.06M	1.93B	-117.78M	-6.11B	-7.01B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
4.47B	5.38B	7.92B	4.35B	14.27B
	Total Assets
45.76B	44.59B	46.05B	42.47B	48.19B
	Total Debt
14.19B	15.29B	21.83B	17.57B	21.52B
	Net Debt
10.66B	10.86B	14.74B	14.57B	10.61B
	Total Liabilities
32.39B	32.41B	39.70B	36.80B	38.85B
	Stockholders Equity
13.37B	12.09B	6.25B	5.19B	9.26B
Cash Flow		Free Cash Flow
1.94B	3.25B	-6.22B	-6.35B	-5.80B
	Operating Cash Flow
2.11B	3.35B	-5.95B	-5.95B	-5.41B
	Investing Cash Flow
-2.44B	-1.74B	1.26B	1.26B	159.30M
	Financing Cash Flow
-1.37B	-4.29B	-2.96B	-2.96B	9.37B

Iqiyi Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.73
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IQ, the sentiment is Negative. The current price of 1.73 is above the 20-day moving average (MA) of 1.73, below the 50-day MA of 1.79, and below the 200-day MA of 2.15, indicating a neutral trend. The MACD of -0.02 indicates Negative momentum. The RSI at 46.08 is Neutral, neither overbought nor oversold. The STOCH value of 66.92 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IQ.

Iqiyi Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NFLX	76 Outperform	$515.86B	57.28	40.84%	―	14.11%	47.22%
ROKU	64 Neutral	$11.26B	―	-4.34%	―	17.30%	81.72%
WBD	63 Neutral	$24.81B	―	-27.69%	―	-5.58%	-254.85%
Sector *	61 Neutral	$14.55B	5.81	-3.99%	6.41%	2.71%	-31.56%
IQ	59 Neutral	$1.67B	41.29	2.21%	―	-10.05%	-85.30%
PARA	56 Neutral	$8.48B	―	-28.56%	1.68%	-4.50%	-898.86%
PARAA	51 Neutral	$8.45B	―	-28.56%	0.89%	-4.50%	-898.86%